Andromeda (ASX:ADN) says dry processing – which is faster and lower cost – could be a goer for its Poochera halloysite-kaolin project in South Australia.

Kaolin is an aluminous clay used to make high purity alumina (HPA), which is in demand because it helps stop lithium-ion batteries from catching fire.

HPA is also used in things like LED lights, smartphone screens and surgical tools.

Andromeda wanted to find out whether dry processing would give it a semi-processed product (more than 1 per cent quartz), or a fully processed product (less than 1 per cent quartz).

Results “exceeded expectations”, the company says.

Dry processing successfully removed virtually all of the quartz sand from the final product, with less than 1 per cent remaining.

Andromeda says this is the global standard requirement for customers of kaolin products — being able to meet that criteria without using any water “represents significant capital and operating cost savings”.

The Andromeda share price has ranged between 0.5c and 0.9c over the past 12 months.

 

Andromeda managing director James Marsh told Stockhead that wet processing is typically 2 to 3 times more expensive.

“I was expecting to have a final sand content of greater than 1 per cent and possibly 3 to 5 per cent,” Mr Marsh says.

Less than 1 per cent is a generally accepted global specification for a high quality kaolin product, and most customers will not accept any product more than 1 per cent.”

A number of operation in the US use dry processing; the only significant kaolin production in Australia used a wet process and they cannot compete with the US dry processed products due to costs, Mr Marsh says.

“It is not often possible to use a dry process for kaolin so this is an excellent outcome for us,” he says.

Bulk sample testing by potential end users is due to start soon.

140 tonnes is at a wet processing kaolin plant in China awaiting testing, 20 tonnes is being prepared for shipping to another Chinese wet processor and a smaller amount to a Chinese dry processing plant, the company says.

Outside of China, other discussions have kicked off with potential end users in Japan and Europe.

Andromeda is currently investigating a simple business model – start by shipping raw ore from its Poochera project in South Australia to HPA producers in China.

This hopefully reduces initial start-up costs because it doesn’t need to build a processing plant to start making cash.

Andromeda’s aim is to move rapidly into prefeasibility stage after the Poochera scoping study is completed in the first half of 2019.

 

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